ETH Return to $1,400 in the Hands of Today’s US CPI Report and the Fed

Key Insights:

• After Wednesday’s bullish session, bitcoin (BTC) and ethereum (ETH) were back in the red this morning.
• Geopolitics and Fed fear weighed on the pair this morning as investors look ahead to the US CPI report.
• The technical indicators remain bearish ahead of the all-important US CPI report, with another spike likely to drive a flight to safety.

On Wednesday, bitcoin (BTC) gained 0.51%. Reversing a 0.34% fall from Tuesday, BTC ended the day at $19,160. Notably, BTC fell short of $20,000 for the fifth consecutive session. However, BTC avoided the red for the second time in eight sessions.

A mixed morning saw BTC fall to an early low of $19,025. Steering clear of the First Major Support Level (S1) at $18,860, BTC rose to a late high of $19,233. BTC came close to the First Major Resistance Level (R1) at $19,263 before ending the day at sub-$19,200.

Ethereum (ETH) rose by 1.09%. Reversing a 0.78% loss from Tuesday, ETH ended the day at $1,294.

A choppy start to the day saw ETH fall to an early low of $1,275. Steering clear of the First Major Support Level (S1) at $1,265, ETH rallied to a late afternoon high of $1,307. ETH broke through the First Major Resistance Level (R1) at $1,296 before falling back to end the session at $1,294.

US economic indicators and the FOMC meeting minutes delivered direction in the second half of the day. While softer than expected, US wholesale inflation numbers tested buyer appetite. However, the FOMC meeting minutes provided late support. The minutes revealed a willingness amongst some members to ease the pace of rate hikes should economic conditions warrant it.

While the minutes were relatively crypto-friendly, an escalation in the war in Ukraine limited any upside.

This afternoon, the US CPI report and FOMC member chatter will have a material influence. Another spike in inflation would weigh on riskier assets and support more hawkish FOMC member chatter.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.79% to $19,008. A bearish morning saw BTC fall from an early high of $19,172 to a low of $18,953 before steadying.

BTC fell through the First Major Support Level (S1) at $19,046.

Technical Indicators

BTC needs to move through S1 and the $19,139 pivot to target the First Major Resistance Level (R1) at $19,254. A BTC breakout from the Wednesday high of $19,233 would signal a bullish session. However, FOMC member chatter will need to be less hawkish, and US inflation will have to soften to support a breakout session.

In the case of an extended rally, BTC should move through the Second Major Resistance Level (R2) at $19,347 to target $19,500. The Third Major Resistance Level (R3) sits at $19,555.

Failure to move through S1 and the pivot would likely see BTC test the Second Major Support Level (S2) at $18,931 and support at $18,900. Barring an extended sell-off, BTC should avoid sub-$18,900 and the Third Major Support Level (S3) at $18,723.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $19,370. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA. The signals were bearish.

A BTC move through R1 ($19,254) would give the bulls a run at R2 ($19,347) and the 50-day EMA ($19,370). However, failure to move through the 50-day EMA would leave BTC under pressure.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 1.30% to $1,278. A bearish start to the day saw ETH fall from an early high of $1,299 to a low of $1,272.

ETH fell through the First Major Support Level (S1) at $1,277.

Technical Indicators

ETH needs to move through S1 and the $1,292 pivot to target the First Major Resistance Level (R1) at $1,309. However, investor sentiment would need to improve to support a return to $1,300.

In the event of an extended rally, the Second Major Resistance Level (R2) at $1,324 would likely come into play. The Third Major Resistance Level (R3) sits at $1,356.

Failure to move through S1 and the pivot would leave the Second Major Support Level (S2) at $1,273 in play. Barring an extended US session sell-off, ETH should avoid sub-$1,250. The Second Major Support Level (S2) at $1,260 should limit the downside. However, updates from Ukraine, the US CPI report, and FOMC member chatter could put ETH under more pressure.

The Third Major Support Level (S3) sits at $1,228.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat at below 50-day EMA, currently at $1,311. The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

A move through R1 ($1,309) and the 50-day EMA ($1,311) would give the bulls a run at R2 ($1,355) and the 100-day EMA ($1,332). However, failure to move through the 50-day EMA ($1,311) would leave the support levels in play.